The National Electricity Market
Wholesale electricity prices in December parried back some of November increases with less frequent extreme pricing in the northern States and some very low pricing through the Xmas shutdown period. Over the month NSW and QLD had the highest prices, both averaging $134/MWh, down 39% and 24% respectively from last month. TAS decreased 21% at $76/MWh while VIC dropped 18% to average $52. SA was the only State to increase average price – up 1% at $61.5/MWh.
Electricity Generation Mix
Total grid-scale generation for December increased by 5.9% from November levels. Given that there is 1 more day in December, increasing roof top solar, and extended holiday shutdowns, this corresponds to a significant increase in underlying demand for the month.
Coal generation increased significantly as did Solar. Hydro generation was down 21%.
Gas Generation
Gas generation was flat overall in December. Compared to 12 months ago gas generation was 26% more than it was in December 2023 and the highest level for December in 4 years.
By State, gas generation changes were mixed. The States with increases were NSW, which rose 19%, while QLD increased 4%. SA had a 14% decrease, while VIC fell 5%. TAS gas generation also fell - 12% on very small numbers.
Hydro Generation
Hydro generation decreased 21% in December compared to November levels, close to the average levels seen in the last 9-years, for this time of year, as shown below.
Storage in Hydro Tasmania’s lakes rose through December. Storage ended the month at 6,866GWh (48% full), an increase of 140GWh over the month. This is 9% more than the same time last year and close to the highest level seen in the last 9 years, as shown in the following chart.
Snowy Hydro’s storage fell marginally during December. Snowy finished the month 47% of full (2,507Gl) – a 1.5% decrease over the month. Levels are now below the 9-year average for this time of year as shown in the following chart.
Climate outlook overview (from BOM)
The long-range forecast for January to March shows:
- a wetter than average season is likely for large parts of eastern, western and northern Australia
- an increased chance of unusually high rainfall for parts of western, northern and eastern Australia with highest chances across northern WA
- warmer than average days are likely across much of southern and eastern Australia and parts of the tropical north
- warmer than average nights are very likely with an increased chance of unusually high overnight temperatures nationwide.
New Renewable Generation (Excluding Hydro)
Total renewable generation (wind and solar, including roof-top solar) in December was a new record - 7,475GWh – smashing the previous record set just 2 months ago by nearly 10%! Utility Scale Solar generation was up 19% from November levels and up 13% over the same month last year. Wind generation only increased 3% from last month and was down 2% compared to December last year.
The following chart shows the monthly energy produced for each of these renewable types since 2017.
The Electricity Futures Market
Futures prices increased through December in all States, across every calendar year.
In NSW CAL25 was up 5% at $137/MWh, CAL26 was up 4% at $126, while CAL27 closed up 3% at $125. CAL28 settled at $125 – up 1%.
Calendar Year Contracts for New South Wales
QLD prices for CY 2025 were up 6% at $121. CAL26 increased 4.5% closing at $107.5, while CAL27 finished up 5.5% at $100. CAL28 traded up 4.5% at $99.
Calendar Year Contracts for Queensland
VIC futures prices for CAL25 were up 4% at $84, CAL26 was up 3% at $76, while CAL27 was up 2% at $71. CAL28 traded up 2% at $72.
Calendar Year Contracts for Victoria
SA has less liquidity in the futures markets than other States, so changes tend to be lumpier and less a true reflection of the underlying market. For completeness we have included the graph below.
The Gas Market
Internationally, LNG netback prices ended the month at $19.79/GJ – up 11% from last month. Forecast prices for 2025 were up 5.5% at $20.42/GJ. Forward prices for 2026 were published for the first time this month – currently expected to average $17.5/GJ. (Note that netback prices are indicative of international prices – they are produced by the ACCC and quoted in Australian dollars. They are net of the estimated costs to convert from pipeline gas in Australia to LNG, hence the term “netback”)
Domestic spot gas prices increased again through December. The following graph shows the 30-day rolling average price at Wallumbilla gas supply hub – ending the month at $15.7/GJ, a 13% increase from November levels. This is still well below the LNG netback price. Prices are 39% above what they were the same time last year.
Gas storage at the key Iona storage facility rose through December. Storage increased to 15.8PJ – a 13% increase over the month. Storage is close to the average levels we have seen at this time of year for the past 8 years.
LPG is an important fuel for many large energy users, particularly in areas where reticulated natural gas is not available. The contract price of LPG is typically set by international benchmarks such as the Saudi Aramco LPG – normally quoted in US$ per metric tonne.
The following graph shows the Saudi Aramco LPG pricing for the last 3.5 years as well as forecast pricing for the year ahead. Futures pricing increased over the last month.
The other main contributing factor to LPG prices in Australia is the exchange rate against the USD. The exchange rate fell through the month ending just above 0.62. This would tend to push up LPG prices when quoted in AUD.
The Coal Market
The global energy crisis has been as much about coal as it has gas. The war in the Ukraine has driven energy prices, including coal, up. Prices in December fell, ending the month at US$125/T – a 9% decrease on the November close. These prices are finally returning to levels close to what we expect to see as shown in the following graph of prices over the last 10 years.
High international coal prices continue to be an important driver of electricity prices especially in the States most reliant on black coal generation – ie QLD and NSW.
Environmental Certificates
The following graph shows environmental certificate spot prices over the last 4 years.
After recent falls, spot LGCs rebounded in December – up 13% at $32.25. ACCUs had a large fall – down 10% to 36.5. VEECs and ESCs also fell, both down 2% to $110.75 and $14.25 respectively. STCs were unchanged at $39.9.
Future dated LGC price changes were mixed through December. CAL24 was down 5% at $32.45, CAL25 down 2% at $34, while CAL26 increased by 9% to $28. CAL27 decreased by 3% to $21.5 while CAL28 increased 2% to $20.5.
About this Report
This energy market summary report provides information on wholesale price trends for all regions within the National Electricity Market (NEM) and environmental scheme certificates.
Please note that all electricity prices are presented as a $ per MWh price and all certificate prices as a $ per certificate price.
All NEM spot prices are published by the Australian Energy Market Operator (AEMO). Futures contract prices are sourced from ASX.
Further information can be found at the locations noted below.
- NEM Spot market – AEMO publishes a range of detailed information which can be found here: https://aemo.com.au/Electricity/National-Electricity-Market-NEM/Data-dashboard
- Weather and Climate data – The Bureau of Meteorology publishes a range of weather related information which can be found here: http://www.bom.gov.au/climate/
Disclaimer
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